You are planning to make monthly deposits of $500 into a retirement account that

Question

You are planning to make monthly deposits of $500 into a retirement account that pays 9 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 35 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Future Value: $

You are planning to make monthly deposits of $500 into a retirement account that pays 9 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 35 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Future Value: $

Explanation / Answer

Monthly rate = 9% / 12 = 0.75% per month

Period in months = 35 x 12 = 420 months

Monthy deposits = $500

Cumulative F.V. Factor of 0.75% for 420 periods = 2941.7845

Future Value of $500 annuity for 420 months = $500 x 2941.7845

= $1,470,892.25 (Answer)

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